As well as providing access to the text of the report, this site provides additional information and comment about party funding in the UK and elsewhere, as well as more detailed discussion of the various reform options.

The comment and analysis section provides links to the additional work we have published on party funding since the report was released, including our written evidence submitted to the Committee on Standards in Public Life.

The problem with party funding

Political parties in the UK are funded from a variety of sources including membership and affiliation fees, fund-raising and commercial activities, government grants and voluntary donations. For all three main parties, donations are the single largest source of income, with a significant proportion of income coming from large donations comprising five, six and – and in some cases – seven figure sums.

The problems associated with funding political parties via ‘big donors’ – whether those donors are individuals, corporations, trade unions or other organisations – are increasingly clear. Accusations of impropriety are widespread – although they are rarely, if ever, proven.

Such accusations centre on claims that at least some donations come with strings attached – principally as a means of either ‘buying’ honours for an individual or securing a change in policy for organised interests. Allegations of ‘sleaze’ in the mid-1990s and ‘cash for honours’ a decade later are typical of the controversies associated with party funding. More recently, accusations surrounding large-scale donors to all three main parties featured prominently in the 2010 General Election campaign.

The impact of such controversies on public attitudes towards party politics is difficult to measure, although opinion polls clearly demonstrate ongoing public concern about party funding.

Political concern about the issue is also highly apparent. The coalition has promised to reach ‘detailed agreement on limiting donations and reforming party funding in order to remove big money from politics’.

In July 2010, the Committee on Standard on Public Life, announced that it is to carry out an inquiry into party funding, with the intention of reporting in late Spring 2011.

The way forward

We very much welcome the decision of the Committee on Standards in Public Life (CSPL) to examine party funding issues. The committee’s 1998 report formed the basis for the last major legislation relating to party funding (the Political Parties, Elections and Referendums Act 2000), helping to ensure that reforms were brought forward on the basis of robust evidence, clear principles and cross-party consensus.

For reform to be fair and sustainable, such an approach is essential – although working in this way offers no guarantee of success, as the Phillips review of party funding in 2007 demonstrated. However, while inter-party talks which took place after the Phillips review ultimately failed to achieve consensus, the CSPL inquiry will surely demonstrate that there is already much to build on.

Our report is aimed at anyone seeking to understand the issues concerned with the funding of political parties in Britain today and we hope that it will be of value to the crucial efforts to bring about reform during the 2010-15 Parliament.